The German Minister of Finance, Christian Lindner, has revealed that his country is closely monitoring the economic crisis in the country and will engage international creditors on how best to support the recovery process.
He said the security of countries like Germany and other superpowers in Europe depends on the stability of developing countries in Africa, including Ghana, and so it is important to assist in creating opportunities for employment and improved standard of living through bilateral trade and direct investments.
“I am completely aware that you are suffering from a severe economic situation, and Germany is supportive as the second largest bilateral trade partner of the country. We are monitoring and have seen the efforts your government is making.
“We are talking to creditors on the international market as well to see what can be done to support Ghana. We are expecting creditors’ committee to consider the situation at hand and negotiate with an intention of what can be done to assuage the economic hardship and return Ghana to an economic growth path,” he said.
The minister made these remarks when he interacted with students of the Department of Economics and Finance at the University of Ghana, Legon. He, however, reiterated that the development of the country is in the hands of its natives, urging the youths to be concerned about matters of development.
Debt waiver and rule-based international order
Responding to a question from the students about whether Germany and other external creditors would consider debt forgiveness for Ghana, Mr. Lindner mentioned that on the international credit market, it is important for states to keep their credibility with creditors globally by being in good standing, and that asking for a waiver could stain the country’s image.
He emphasised that practices in the international credit market are guided by the ‘rule-based international order’, which guarantees financial stability globally, especially in the restructuring of debt.
“We need legal proceedings and rule-based procedures when it comes to the restructuring of debt. It would not only be a gesture of good faith if there is debt relief bilaterally, but it could harm in the long term the rule-based international order, and Ghana in the long term would not benefit from this.
“This is why I am advocating an International Monetary Fund (IMF) programme, and we are also in favour of the G20 to review this over-indebtedness situation. Within this process, Germany is supportive but we have to remind China of its responsibility as one of the most involving bilateral creditors of Ghana,” he added.